Wharton MBA for Executives

In my MGEC reading, I read about game theory and being a first mover as well as network externalities, etc.  The conclusion is basicaly that sometimes it’s important to be first in a market especially if there are network effects.  This includes a company like eBay where they came first in the US for auctions so they got all of the users and they are still most popular in the US simply because everyone else is there.  If I want to sell something via auction, I sell on eBay because that’s where I get the highest sales price.  By the way, I actually am an ebay user and I have a rating of 272 (which is pretty high for an individual seller like me) and have been active since August 1999.  Another example is Microsoft Windows.  It may not be the best operating system out there but since most other people use it, chances are you use it.

But there are examples of companies that do very well being second or third or fourth, etc.  It’s great to be second because you can observe the mistakes that the first company makes and make improvements.  This is especially true on the internet where there is very little customer loyalty.  I used to buy CDs a long time ago on cdnow.com but quickly left to buy CDs on buy.com or amazon.com when they became a few cents cheaper.  CDNow went out of business many years ago.

One example of being second is MySpace.  MySpace is huge with over 100 million users (yeah, they aren’t all real users but they still have a lot of users).  They came after Friendster and learned from some of the mistakes that Friendster made.  Today, we have Facebook and Facebook is growing much faster than MySpace.  So with that long introduction, I start my quick analysis of social networking.

To start my analysis, let’s take a quick history lesson.  When I first got onto the internet, it was in 1991 when I went to college.  The internet primarily consisted of email (99% of what people were doing), bulletin board systems, usenet, MUD (multi-user dungeon…or text based fantasy worlds similar to SecondLife or Everquest), NetTrek (predecessor to World of Warcraft…kinda), and IRC (chat).  However, most people were using the internet for email.  The internet was about communication between people who are on email.  I used it to communicate with friends in other universities since we all had email addresses as well as communicating with professors and TAs.  Among friends, it was better than writing letters and cheaper than making phone calls.  It was also nice because I emailed many friends at once rather than get on group phone calls or something like that.

The internet really took off in the mid 90s when the world wide web (www) really got popular.  I remember back in 1994 when I first got onto the www, there really weren’t many web sites out there.  I created one of my own just for fun and professors would create one for their class where you could download the syllabus, etc.  Netscape then released their browser and it was much better than Mosaic so it made the www much more friendly to non-techs.  Then sites like ESPN came out (they were actually espn.sportszone.com back then).  Search engines like yahoo, altavista, excite, etc. all came out around this time.  Then I noticed one of my classmates doing a web search on “hash table algorithms” and at that point I realized that the www was really about accessing information.  Al Gore soon made the internet == www.

So now the internet was about access to information.  I still think this is where the internet excels.  The information isn’t always correct but there is certainly a plethora of it.  A few days ago I heard that a friend won a brand new car in a contest.  I had heard that you have to pay taxes on prize winnings but I wasn’t sure.  20 years ago, you’d have to do some research in a library or call up a CPA or something.  Now, I just did a quick web search and found the answer and more info that I every wanted within minutes.

So back to MySpace.  Friendster and MySpace were about meeting new people.  Web 2.0 was largely about meeting new people.  This is why dating sites became so popular as well as social networking sites.  Instead of meeting people at a bar or random gathering, the internet became a place to find and meet new friends.

However, for most people (myself included), I don’t actually care to meet random new people.  I enjoy meeting my new classmates at Wharton because we all have something in common…school.  But in general, I really have no desire to make new friends or meet new people and I think many people also feel this way.

So I think the next progression is in sites like Facebook where access is more restricted.  Facebook is not about meeting new people (although you certainly do meet new people there sometimes).  It’s really about finding and keeping in touch with the people you already know.  Facebook is great for keeping in touch with your close friends as well as those friends who were close but simply lost touch.  For many of us, our best friends in High School and College were relationships that we treasured yet as the years went by, we lost touch with many of them.  Or we are still in touch but it’s not much more than a few phone calls and a Christmas card each year.  I really do want to keep in touch with these people but simply don’t have the time or effort to maintain all of these relationships.  Facebook allows me to do this and this by controlling who has access to my Facebook page.  Facebook isn’t about becoming the next Tila Tequila with millions of friends, it’s about a hundred or so friends that you actually do know and want to keep in touch with.  This is why Facebook is so much better than MySpace.  The apps on Facebook also give it a dimension of being an end-all destination where you can do pretty much everything within Facebook.  Facebook is good at giving you really no reason to leave.  I play poker, instant message with friends, write message (basically email), update my status, etc….all without ever leaving Facebook.

So where does that leave the future?  I really believe that the next phase of progression is mobile.  This is why I started a mobile wireless software company in this space.  I believe that online social networking is here to stay so there is no way that I am going to compete against the Facebooks and MySpaces of the world.  However, I believe that being tied down to a computer is not where social networking fits best.  Social networking makes the most sense when it is mobile and with you 24/7 wherever you are.  Social networking is most relevant when you are out living your life, not when you are sitting in front of a computer at the end of the day.  This is why my company and our mobile software product is really about our own mobile social network but just as important, it is about connecting your mobile phone and your life with your existing online social networks.  Also, the online social networks do change as we saw with Friendster, Myspace, and now Facebook.  My goal is to continue to integrate with the leaders and continue to integrate the mobile phone to whoever is the online social networking leader.

Social networking is the current stage in our progression of internet technology.  I believe that mobile technology is the next stage where we are no longer bound by home computers.  Our class at Wharton communicates via Facebook and for many students, this is the first time they are experiencing social networking on the internet.  I think many of them signed up simply because they wanted to stay in touch with our Wharton class but they are finding many long lost friends.  Sometimes this is not so good (remember the people you used to avoid in High School) but when all is said and done, I think social networking is valuable and fun.

We had a management paper due at midnight Pacific time, and I managed to e-mail it to Professor MacDuffie at exactly 12:00am. The paper was worth 25% of the grade, and was due very quickly after the two recent mid-terms so many people were stressed out about it. It was difficult to condense the paper to the 1,250 word-limit [we were allowed to be under or over by 5%]. It was interesting to see Facebook status messages close to midnight

[Name] loves Just-In-Time paper performance.

[Name] is happy for the 5% overage allowance!

[Name] just woke up in a panic - paper due! Almost forgot to submit the darn thing.

[Name] is done with the paper with good 28 minutes to spare.

[Name] 1296 is the final answer.

[Name] 1278 will have to do.

Here are some status messages from a few hours ago:

[Name] 1272 is the magic number…

[Name] is still at 1400 words..

[Name] wondering about word count…

[Name] is trying to figure out how to cut 250 words out.

One person didn’t realize he e-mailed this to the entire class:

Hello Professor MacDuffie,

Due to some unforeseen and pressing commitments at work that needed my attention, I just arrived at home. I’ll need an hour to finish my analysis paper and I’ll be turning in my paper before 1am PDT. Hope you’ll kindly consider my submission

Thanks
[Name]

We had a pretty intense weekend that started with the midterms (both were pretty brutal in my opinion). The accounting midterms were graded and returned the next morning. Nobody scored a perfect 130/130 but there were a few really crazy scores…127, 128, and 129. Congrats to everyone for getting through the first 2 midterms.

We lost one student this past week. It’s definitely a tough and intense program so I certainly wish him luck in his future. Perhaps next year if his schedule is better, we’ll hopefully see him back.

This was a weekend of extremes. I have always been one to live at extremes…I work very hard when I need to and I like to play hard. It looks like most of the class pretty much is in line with that lifestyle so that’s good.

Friday was tiring because of the midterms and the stress that goes with it. However, after the midterms, most of us headed to Miriam’s place for her party. The house and view were beautiful, the catered food was excellent, and it was another great opportunity to mingle with the class. After the party, a group of us headed out at around midnight to a local club for more fun. We ended the night stuffing 7 of us into Tran’s car (we had 5 people in the back - I should have gotten a picture of that…) and somehow making it back to the hotel.

But alas…this post would be WORTHLESS without pics so here are a few. The official class album in on picasa at http://picasaweb.google.com/wemba34 (thanks to the class photographers Josephine, Julie, and Dan).

Some of the class 34 ladies…

Some of the class 34 guys

Goofing off (I’m a little worried about Redmond here…)

Ron, Annie, and Mike…too cool.

In da club…

Again, the official class photo website is at http://picasaweb.google.com/wemba34 so enjoy!

Ok, our midterms are over. It was a brutal day. I got to school about an hour early. Similar to a boxer doing a quick work out in the back room to get a quick sweat going, I got in early to review some notes and get my brain warmed up to doing problems.

I walked into our lecture room at 8:30 (one hour before the start of class) and there were already a handful of students in there studying. It was pretty intense.

Both midterms were tough but I expected tough. I don’t really know how I did but hopefully I scored around the mean or so. Who knows…I guess we’ll see over the next week or so. Accounting is supposed to be scored by tomorrow and MGEC is sometime in the next few weeks.

After the midterms and class, most of the class headed out to Miriam’s place for her party. The party was rockin’ with hors d’oeuvres, wine, beer, etc. It was a great party.

After the party, a group of us headed out to a local dance club. It was a lot of fun.

I’m back in the hotel and it’s almost 3AM so I should head to bed.  There were a lot of pictures taken and they’ll be posted in the next few days.

I’m supposed to check out the hotel and meet my group in 5 hours so I’m off for 3-4 hours of sleep.

Wow, isn’t this exciting? NOT!!! Our first midterm is tomorrow! Wait…our second midterm is tomorrow too! Oh stop the presses…our paper is due tomorrow Monday (thanks JPM!)

I haven’t taken a midterm since 1996. I did try to spend as much time as I could preparing for this midterm. In fact, I think I probably studied harder than I ever have in my life (although that isn’t really saying much). The saddest part? I’m probably going to score right down there in the LT range.

I took my final practice accounting midterm tonight. I took the 2007 midterm so it’s from last year. Never mind that I took this same midterm last week so I’ve seen the problems and read the answers already last week. I took the midterm again today and scored…123. The mean is 123.5. LT cutoff is around 110. This basically means that I’m down at LT range (or worse?) if I take a brand new midterm that I’ve never seen before.

The craziest thing? I took at look the statistics and it looks like at least 1 person scored a PERFECT 143 out of 143 last year! WTF is that? That’s one crazy mofo!!! I’m not usually a violent guy but that guy seriously needs the SMACKDOWN laid upon his/her CANDY ASS!

Ok ok ok…I’ll calm down now. This is a high class Wharton blog so no more references to lowbrow professional wrestling (although I am known as R-V-D!).

Anyway, I certainly wish everyone in our class good fortune and luck on the exam. May Smetters write an exam that’s more like his past exams and less like the additional problems at the end of his lectures. May Lambert write an exam that doesn’t have funky questions about “fair value on a balance sheet and accurate cash flow statements” and esoteric “why” type questions.

For tomorrow I’ll remember MR=MC, depreciation is not a source of cash, and you should raise the price if the elasticity of demand is inelastic.

I finish this entry with two newsworthy items:

1) Tomorrow night we party. Dancing, libations, birthday wishes (happy birthday Miriam and thanks for the invite!)

2) In 4 weeks we do this again. Midterm #2 for accounting. ROFL!

I never thought it would be easy and everyone told me that getting an MBA while you’re working is difficult.  But the amount of work if you want to do everything right is just crazy.  I think it’s virtually impossible to do all of the following:

1) Read all of the assigned textbook reading

2) Do all of the assigned practice problems in the textbook and bulkpacks

3) Read all of the bulk pack materials and prepare for the cases

4) Review the notes from the past session

5) Prepare ahead of time for the next session

6) At exam prep time, review everything and do practice problems of past midterms and write up your cheatsheet (when permitted by the professor), etc.

While I have no doubt that if you did all this, you would do well, I just can’t see how anyone who works full time could possibly get close to doing all this stuff.  So like most people, you cut some corners here and there and it’s up to you to decide how you learn most effectively.

But then again, I was thinking about full time students.  Sure, they seemingly have all the time in the world since they don’t work.  But when I was in school (granted, I was a bit of a slacker), I spent all day long on campus hanging out with friends, going to classes (sometimes), grabbing food, shopping, etc.   I rarely studied between the hours of 8am-7pm which is basically what I’m doing now at work.  Also at school, I rarely studied on weekends so the weekends when I’m in school now would usually not have been spent studying if I were a full time student.

So I think I study just as much (if not more) than if I were a full time student.  I also have to study on weekends too.

The only caveat is that as a full time student, if it’s exam time you have the option to actually study during the day if you want to.  With work, I simply don’t have that option.

The conclusion?  A Wharton MBA is hard.

The Wharton West program also includes meals.  The food so far has been pretty good.  There is hot breakfast on Saturday morning usually consisting of Pancakes, scrambled eggs, oatmeal, and turkey sausages.  There is also the usual assortment of bagels, pastries, donuts, fruit, cereal, etc.  And for drinks, they have milk, orange juice, etc.

The Wharton West campus is in the renovated Folger building in San Francisco south of Market St.  Wharton occupies all of the 5th floor and part of the 4th floor.  My group had a meeting at 8AM on Saturday but I arrived a little early (at 7:45AM) so I took the opportunity to take some pictures of a mostly empty building.  It turned out that my group flaked out so only one other guy showed up at 8AM so I had a lot of time but oh well.

The main dining area

Group study room.  Each group is assigned a study room.  The study room includes a desk with cables to connect to the interne and monitor.  There is also a computer and printer in each room as well as a white board and large post-it.

Another view of a group study room.

This is the bulletin board that contains all of our class information, schedule for the weekend, etc.

The break area between the two lecture halls.  There’s a lecture hall to the left and another one to the right.  When classes go on break, everyone usually congregates here for drinks and snacks.  Thee are also plasma TVs usually playing the news.

Another view of the break area.

There is always a good stock of water, soda, juices, coffee, and tea.

Lecture hall.

The view from the back of the lecture hall.

The outdoor seating area.  I’ve never actually seen students hang out over here.

One of the requirements of the Wharton West program is staying at the Le Meridien Hotel on class session weekends. The tuition and fees include overnight lodging for all students so even if you live a few blocks away, you may as well get the Starwood points and stay at the hotel. It’s also great because the class always gets together on Friday night to hang out, play cards, etc. The Le Meridien also gives us our own bar on the 3rd floor with discounted drinks so that’s very nice. They also provide a special rate for Wharton students that is sometimes cheaper than the published rate. I checked into the hotel a night early this last trip and got the discounted rate. I checked online and the rate was $409/night but they gave it to me for $175/night. I did hear that sometimes the online rates are cheaper and in those situations, they will honor the cheaper rate obviously without making you check in and out.

I haven’t been upgraded to a nicer room yet but I do know a few classmates who got lucky and got upgraded to suites, etc. Anyway, I had my camera with me this past weekend and took a few pictures of my room before I messed it all up with my junk. The view wasn’t that great (some rooms have nice views of the bay) but oh well.

Anyway, here are some random pictures from my room this past week.

This is the artwork that greets you went you step into your room.

The main living room and bed area. The beds are nice (although not quite as nice as the Westin Heavenly beds).

The tv set is a nice LCD/plasma type flat screen. I haven’t had the time to watch much TV at home or here in the hotel but it looks nice.

Another picture from a different angle of the bed and desk.

The bathroom is of course very clean and nice.

My view from the window.

The view looking down to the street.

The other view looking to the right side.

A bird came by to visit me while I was taking pictures. It actually made a lot of noise because the bird was frantically tapping away at the window and barely able to keep its balance on the small metal ledge.

RVD.

Session 2 ended yesterday and it was great!  I think the long “hell week” that we had last time really prepared us for this session pretty well.  The weekend seemed so short since we just went to 2 days of classes.  When I was checking out of the hotel, it felt like I had just checked in (and I stayed an extra night this time on Thursday!).

But in any case, I was dead tired for the last hour of class.  I did force myself to stay awake during MGEC but I was glad when class ended for the day.  Price discrimination methods were certainly interesting and eye-opening.

MGMT was also stimulating.  One case involved a work situation where an employee brought in a huge client but started demanding things that were appropriate for his level (office, different rules, etc.).  The consensus was that we wouldn’t give him his own office and make him play by the same rules regardless.  Although that probably was the right answer and the best thing to do, I’ve just been in a lot of similar situations where my obligations to the company and board have forced me to give raises when I didn’t want to, etc.  For example, if he was single handedly bringing in 80% of the revenue of that office, it would probably make this decision more difficult because it would likely mean that the office would have to close and everyone would be out of a job.  Ultimatums are tough and usually not tolerated in any office but employees routinely approach their bosses for salary increases essentially saying “Competitor-X offered me $Y but i really like it here but i also can’t ignore their offer so if you want me to stay, please match $Y”.  Anyway, it was too bad that we ran out of time in class.

There’s a lot of anxiety because we have 2 midterms and a paper due next session.  We basically have a little less than 2 weeks to prepare for both midterms and write a management paper.  Professor MacDuffie was great in pushing back the paper date a couple of days so that we could relax a little bit.  But I’m still going to have to spend at least a couple of days preparing for it.

Everyone seems really stressed about MGEC.  It’s a tough class.  I went through 2 of the past midterms and did a decent job but question #5 in the 2006 midterm is pretty brutual!  The part about calculating the consumer surplus is tough!  I got it wrong and spent about an hour figuring out how it works.  The good news is that since we pick 5 out of 6 questions, I would have just not answered that one.  I’d be happy to help anyone out if needed so email me if this questions gives you problems.
I’m still terrible at accounting.  Other students don’t seem to have much trouble so I think it must have something to do with my brain and calculating debits/credits and figuring out when it affects cash flow and when to add things back in or remove them from the Net Income in the cash flow statement, etc.  I just get confused a lot.  I better figure it out in the next week or so though.

Anyway, classes were fun and hanging out was great.  Most of the class went down to the hotel bar on Friday night.  I ended up leaving at around 12:45 but I heard others stuck around until 3AM!  Lots of drinks were flowing but it was nice to see that everyone was fairly well behaved and responsible.   Next session’s Friday night will be even better since we will have gotten out of 2 midterms that day.